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In this video tutorial, the speaker demonstrates how to create a drop-down menu in Excel. They start with a list of animals like dog, cat, fish, bird, snake, and turtle and want to add codes for each. They explain how to use the data validation feature to create a drop-down list for the codes. By selecting the "list" option under data validation, you can choose the source items for the drop-down menu. In this case, the speaker chooses red, green, blue, yellow, and black as their code options.